In some handicapped games in OGS, the players given handicap are allowed to freely choose where to place the handicap stones instead of being given the standard handicap positions. I wasn’t sure if this is a common practice outside of the server. It certainly seems like being able to enclose all 4 corners with a 8 stone handicap is much harder to play against (as white) than having 8 stones on star points.

I believe this is standard for the Chinese ruleset, it’s just less known because it is widely believed that there is no better way to layout handicap stones than their default orientation (progressively opposing hoshi / star points)

n some handicapped games in OGS, the players given handicap are allowed to freely choose where to place the handicap stones instead of being given the standard handicap positions. I wasn’t sure if this is a common practice outside of the server.

Handicap placement is determined per ruleset. Concerning the OGS specific rulesets, Japanese, and Korean do not use free placement. Ing SST, New Zealand, and Chinese do. AGA Rules give placement on the star points as the default, but permit tournament directors to specify free placement if they wish. However, on OGS AGA does not use free placement.

Issho:

It certainly seems like being able to enclose all 4 corners with a 8 stone handicap is much harder to play against (as white) than having 8 stones on star points.

Handicaps are rarely something used in serious Go matches. It is usually recommended for teaching situations, to allow newcomers a chance against someone who knows the rules.

However, as you pointed out, handicap stones can affect gameplay to such a degree that the number of stones used is usually very low. You can read more about Handicaps at Sensei’s Library here.